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Impact of Paid Sick Leave on Trucking Industry

A recent FETCO analysis, representing 38 key federally regulated entities including the Canadian Trucking Alliance (CTA), has shed light on the profound effects that mandatory paid sick leave is having on labor productivity and the wider economy. This study comes at a critical time when the supply chain is already under strain from labor shortages and various economic challenges.

In 2022, a federal mandate was introduced requiring all federally regulated employers, spanning crucial sectors like trucking, aviation, and telecommunications, to grant their workers 10 paid sick days. This is in addition to other leave days outlined in 2019, bringing the total to 15 leave days, with 13 being paid. This swift increase in mandated leave days is putting additional pressure on Canadian industries.

Authored by Dr. Rafael Gomez from the University of Toronto, the study highlights the significant financial and operational strain these mandates are causing. Industries integral to the national and international supply chain, such as trucking and aviation, are experiencing disruptions that could have ripple effects on services and consumer costs, potentially fueling inflation.

The report estimates the new sick leave provisions to cost the transportation sector alone about $9.8 million, excluding benefits, which could add another 30%. This has also led to the equivalent loss of 182 full-time staff.

“The results are clear: the paid sick leave mandate is impacting the economy negatively, leading to higher operational costs, disruptions, and collective bargaining challenges,” the study concludes. These issues mirror the concerns raised by the CTA before the implementation of the mandate, advocating for a more balanced approach to sick leave.

Stephen Laskowski, CTA President, points out the unique challenges in the trucking industry, particularly the Driver Inc. scheme, which complicates compliance with the new sick leave policy and creates an uneven playing field. Legitimate companies are burdened with new costs and compliance issues, while others exploiting the Driver Inc. model gain an unfair competitive edge, exacerbating the issue.

FETCO’s report calls on the government to address these policy shortcomings by preventing the ‘stacking’ of paid leave with other benefits and considering a reduction in the mandatory paid sick leave days to a more manageable number, suggesting a cap at five days.

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2024 Canadian trucking; Semi truck loans
2024 Canadian trucking; Semi truck loans

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